updated 08:45 am EST, Tue November 15, 2011

Japan Display unites to make phone, PC displays

Hitachi, Innovation Network Corporation of Japan, Sony, and Toshiba on Tuesday formalized a deal to create a united display maker. Called Japan Display, it will consolidate the production of small- to medium-sized displays, such as those on smartphones, tablets, and computers. The coalition will take 70 percent of its funding from the government-backed Innovation Network while the three private firms will each have an equal share of the rest.

Panasonic was also indirectly involved by selling a larger factory to the group to give it a production base.

The group hopes to start business in earnest in spring 2012 as long as the Japanese government approves the deal.

In forming the alliance, the companies were hoping to improve the "cost-competitiveness" of their display technology, according to Toshiba. At a minimum, the group has faced pressure from Korea, where LG Display and Samsung Mobile Display often get a large amount of business. More recently, Taiwan companies like AU Optronics and Chi Mei have taken potential business away from Japan.

Rumors have repeatedly surfaced that the Japanese companies are being courted by Apple for future iPhone displays, such as efficient low temperature polycrystalline silicon (LTPS) LCDs. Others, though, have pointed to LG staying onboard.

The alliance came just as DisplaySearch issued a report showing that many of the traditional displays of the Japanese companies were flat or on the decline in just the past quarter. Desktop displays were down five percent, while notebooks were only up four percent; TVs were almost exactly flat. Netbooks have crashed 30 percent as tablets, led by the iPad, have shot up 21 percent.